GREENING SUPPLY
CHAIN IN RETAIL
SECTOR
INTRODUCTION

GSC strengthens & build greater support with
suppliers for additional environmental initiatives

GSC also screens suppliers for environmental
performance, work with them on green design
initiatives and provide training & information to build
suppliers' environmental management capacity

GSC – buyer requiring certain level of
environmental responsibility in the business practice
RETAIL SUPPLY CHAIN
SUPPLIERS
Coordinated system to
move product from
supplier to customer
(Raw materials)
MANUFACTURERS
(Finished product)
CONSUMERS
DISTRIBUTORS
RETAILERS
LIFE CYCLE OF PRODUCT
Product
Design
PreManufacturing
Manufacture
Packaging for
Distribution
Disposal
Use/Reuse &
Maintenance
Transportation
LIFE CYCLE OF PRODUCT (2)

There are emissions and consumptions of
resources at every stage of product life

Life Cycle Assessment (LCA) – process used
to evaluate the environmental impact at every
stage of production of a product or service

Final goal: purchase products with the
minimal negative environmental impacts
GSC and the 5 Rs
Reduce
 Reuse (Replace)
 Recycle
 Refuse (Reject, Return)
 Repair (Refine)

What is a ‘Green’ Product?
A ‘Green’ Product:
 Can be recycled
 Have a recycled content
 Be energy efficient
 Emission reducing
 Re-usable
 Biodegradable
 Organic
PURCHASING CRITERIA
GREEN
PURCHASING
POLICY
ENVIRONMENTAL
PERFORMANCE
INFORMATION
PURCHASING
CRITERIA
COMPARISON ON
ENVIRONMENTAL
IMPACT
PRODUCT
LIFE
CYCLE
To cope with environmental problems:
focus on input - purchasing
GREEN INPUT
OUTPUT REDUCED
Reduce input (optimal input)
Materials:
- Non-hazardous
- Easy-to-recycle
- Energy efficient
- Resource saving
Recycled
material
Wastes
Pollution
Hazardous
substances
Carbon Dioxide
5R
Complete the Circle of recycling
Use of recycled products
Designing recyclable products
Proactive sales of
recycled products
Green purchasing
purchase of
recycled products
Discharge after sorting/collection
→easily recyclable
Green Purchasing

a.k.a “affirmative procurement”




Considering the quality, price and the environment
A way of purchasing which gives preference as far as
practicable to those products & services which cause
least harm to the environment
The purchase of items made with recovered materials.
It encompasses environmentally preferable purchasing
i.e. the purchase of products which are least harmful to
the environment & human health
Taking into considerations of the quality, price &
environment, the purchase of a product or service with
the least environmental impact
Green Purchasing
Environmental issues to consider:
 Packaging
 Recycled contents
 Low energy
 Longer life
 Locally produced
 Low pollution
PURCHASING CRITERIA (2)

Green Purchasing Policies and Product
Specifications


Include environmental considerations as a factor
Product Life Cycle

Emphasis on eliminating or reducing potential
risks to health and environment
PURCHASING CRITERIA (3)

Comparison of Environmental Impact


Environmental impact to be given due
consideration
Environmental Performance Information

Manufacturers and distributors to provide
comprehensive, accurate and meaningful
information for purchasing consideration
SUPPLIER AWARENESS AND
TRAINING

Buyer can use purchasing power to create
demand & this demand will in turn push
supplier to produce a green product

This could spur manufacturer to


Use ‘green’ materials
Design for the environment and use the resources
with efficiency
ECO-LABELING


Product adhering to pre-defined criteria
Eco-labeling: 4 range of products in Malaysia





Plastic packaging materials
Cleaning agents
Recycled paper and
Electrical & electronic equipment
Companies assign with eco-label should be
transparent and accountable in

Disclosing finances, evaluation criteria, standards and
monitoring procedures
ISSUES IN GREEN SUPPLY CHAIN

Financial Cost




Smaller suppliers have financial constraint and
may not devote the necessary resources
Essential for consumer to consider overall
benefits
Awareness amongst consumers
Liabilities and Responsibilities

Supplier must comply to the laws and regulations

Example: Computer manufacturer increase offerings to
meet the Green Star standard for energy efficiency
ISSUES IN GREEN SUPPLY CHAIN(2)

Documentation

To meet environmental criteria, consumer can
demand supplier to meet standards in operation
and practise

Formal environmental management system
(EMS) or other certification such as International
Organisation for Standardisation (ISO) to validate
supplier’s compliance
ISSUES IN GREEN SUPPLY CHAIN(3)

Transparency versus Confidentiality

Supplier should be transparent in providing
information for customer’s decision making

However, lack of protection for innovation &
intellectual property challenge the confidentiality
of the information
ISSUES IN GREEN SUPPLY CHAIN(4)

Cooperation and Long-Term Business
Relationships

Supplier’s effort in addressing the environmental
issue can result in:




Cost reduction for consumer
Greater operational efficiency
Enhanced value for consumer
Advantage of cooperation between supplier
and consumer:


Strengthen customer-supplier relationship
Shared savings and benefits
Green Purchasing & Costs …
■Do not be biased against Green Purchasing – does it cost more ?
There are increasing numbers of products which can be purchased at
the same price as conventional products.
■Seek measures to avoid cost increases as a whole, including the
reduction of purchasing quantity, reuse, etc.
― Reviewing the waste, reconsideration of the
necessity, co-ownership, etc.
■Also consider “life cycle costs”.
■Some Green Products may be costly for now, but the stance to
support it may be necessary in consideration of the social
significance of Green Purchasing: “Social Costs”.
PDCA
P
D
PLAN
DO
A
C
CHECK
ACT
Green Purchasing changes
a corporation
Encouraging environmentally conscious management
and product development through the market
Eco-design
Green Purchasing
Consumer
Governments and
corporations
are large scaled-consumer
GPN
Green market
Green Product
Corporation
Environmentally
conscious management
Establish a sustainable society
Manufacturer/service business
End user
Environmentally conscious
management
Parts/Material supplier
Develop greener products
Raw material supplier
＋
Promotion of green
purchasing/procurement
Greening supply chain
Anyone can take the initiatives
Government
Corporation
Consumer
→ Green consumer
GPN
Thank you!